unemployment

The minimum wage is a violation of the United States Constitution. According to Judge Andrew Napolitano,

Collective bargaining has increased the economic means of the great majority of working people in the United State by securing decent wages and benefits for union members and driving wages higher even for the unorganized. But business owners are forced to spend more of their money, which is their property, on labor. Paying minimum wage is involuntary: the government forces it upon business owners, thereby violating the Natural Law as well as the Constitution by compelling the owner of the business to negotiate with all of his employees as if they were one. Also, with minimum wage not only requiring higher wages, but prompting higher cots (benefits, pensions, vacation pay) and higher prices as well, the law clearly legislates the government’s theft of property from the businessperson. [Page 87 of “The Freedom Answer Book” by Judge Andrew Napolitano]

Contrary to what some believe, the minimum wage does not help the people it was intended to help. As Judge Napolitano has said,

Since the poorest members of society also tend to be the least-skilled members, if the minimum wage is set above the level of production that a poor person can achieve with his current skill set, then he will never get a job; and the higher the minimum wage, the higher the barrier poor people have to jump in order to gain employment.” He goes on to explain that “If a person’s skill set is valued at $5 an hour by an employer, this valuation will not change just because the government implements an $8 minimum wage. Instead, this person simply will not get the job. What employer will hire a worker who will actually generate a negative return? So, instead of a poor person having the opportunity to hone his skill set and learn the valuable lessons of hard work that would make him more employable, raise his value, grant him a feeling of accomplishment, and increase the wage he can command in the future, this poor person is rendered unemployable and forced to live a substandard life on the welfare dole because of – Yes! – government-mandated minimum wages.” And, let us “Consider…how the minimum wage impacts poor teenagers who aren’t able to present themselves well in an interview. The main weapon an inner-city teenager would have in this situation would be the willingness to work for a lower wage than his middle-class counterparts would. By giving prospective employers this cost-saving incentive, an inner-city youth could increase his chances of one day successfully competing against the middle- and upper-class teens for employment. Once he gain employment, he could learn useful skills, demonstrate his true value to the employer, learn how a certain business works, build a resume, and command a higher wage in the future. However, since government restricts the ability of an individual to choose how much his own labor is worth, this teenager is forced to remain unemployed, never getting an opportunity to learn very important working skills. This is all, of course, supposedly in the greatest interest of the general welfare of the American people. [Pages 88-89 of “The Freedom Answer Book” by Judge Andrew Napolitano]

In their book, “Free to Choose,” Milton and Rose Friedman echo the previous quote by Judge Napolitano in their own words in the two following paragraphs:

The minimum wage law requires employers to discriminate against persons with low skills. No one describes it that way, but that is in fact what it is. Take a poorly educated teenager with little skill whose services are worth, say, only $2.00 an hour. He or she might be eager to work for that wage in order to acquire greater skills that would permit a better job. The law says that such a person may be hired only if the employer is willing to pay him or her (in 1979) $2.90 an hour. Unless an employer is willing to add 90 cents in charity to the $2.00 that the person’s services are worth, the teenager will not be employed. It has always been a mystery to us why a young person is better off unemployed from a job that would pay $2.90 an hour than employed at a job that does pay $2.00 an hour.

The high rate of unemployment among teenagers, and especially black teenagers, is both a scandal and a serious source of social unrest. Yet it is largely a result of minimum wage laws. At the end of World War II the minimum wage was 40 cents an hour. Wartime inflation had made that so low in real terms as to be unimportant. The minimum wage was raised sharply to 75 cents in 1950, to $1.00 in 1956. In the early fifties the unemployment rate for teenagers averaged 10 percent compared with about 4 percent for all workers – moderately higher, as one would expect for a group just entering the labor force. The unemployment rates for white and black teenagers were roughly equal. After minimum wage rates were raised sharply, the unemployment rate shot up for both white and black teenagers. Even more significant, an unemployment gap opened between the rates for white and black teenagers. Currently [in 1979], the unemployment rate runs around 15 to 20 percent for white teenagers; 35 to 45 percent for black teenagers. We regard the minimum wage rate as one of the most, if not the most antiblack laws on the statute books. The government first provides schools in which many young people, disproportionately black, are educated so poorly that they do not have the skills that would enable them to get good wages. It then penalizes them a second time by preventing them from offering to work for low wages as a means of inducing employers to give them on-the-job training. All this is in the name of helping the poor. [Pages 237-238 of “Free to Choose: A Personal Statement”]

Unfortunately, the real minimum wage is always zero, regardless of the laws, and that is the wage that many workers receive in the wake of the creation or escalation of a government-mandated minimum wage, because they lose their jobs or fail to find jobs when they enter the labor force. Making it illegal to pay less than a given amount does not make a worker’s productivity worth that amount—and, if it is not, that worker is unlikely to be employed.

Know any other wise quotes on this subject you’d like to add? If so, please include them in your comments below.

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